Ecuadorean Rift Bursts Over Chevron ‘Do-Over’

MANHATTAN (CN) – Breaking with their U.S.-based attorney, indigenous leaders from the Ecuadorean Amazon who won a $9.8 billion verdict against Chevron in their home country say they will not accept a retrial of that case in New York. “We filed suit in our country more than 10 years ago, after being told by the courts of New York that they – our original choice – lacked the jurisdiction to provide the relief we sought,” Javier Piaguaje Payaguaje and Hugo Camacho Naranjo wrote in a letter dated April 23 to their lawyer. “Ultimately we found justice in the Ecuadorian legal system, and we stand by the decisions issued by three of its courts. We will not disregard a legal victory that has cost us so much.” Their attorney Burt Neuborne, a professor at New York University School of Law, appeared to be unaware of this rift with his clients when reached for comment Friday. Ecuador’s rainforest residents have been defending a multibillion-dollar judgment against Chevron from the oil giant’s counteroffensive on three continents that label the verdict an extortionate “shakedown.” Chevron’s allegations came to a head last month as the 2nd Circuit in New York considered whether to affirm a federal judge’s finding that the landmark environmental judgment had been “procured by corrupt means.” It was during that hearing that one member of the appellate panel, Judge Richard Wesley, made the stunning proposal of having the two-decade-old case return to New York, where it began as a case against Chevron’s predecessor Texaco in 1993. Ironically, it was Chevron’s attorney, Ted Olson, who rejected the opportunity to erase the company’s billions in liability with a New York do-over. Though the move to eliminate the fraud allegations could wipe out the award, attorneys for the Ecuadoreans and for their adviser, Steven Donziger, said they were open to it. Neuborne told Wesley he would advise his clients that retrial is the “best answer” to their predicament. Chevron spokesman Morgan Crinklaw said the development shows a loss of faith in the judgment by the Ecuadoreans and Donziger. “The fact that Steven Donziger and the lawyer for the Lago Agrio plaintiffs jumped at the idea of having a new trial in the United States demonstrates that even they don’t believe in the legitimacy of the court process in Ecuador or judgment against Chevron,” Crinklaw said in an email. The April 23 letter from Neuborne’s clients in the Amazon may undermine that theory, however. “We sincerely appreciate the effort you put in before the Second Circuit in defending our rights and interests,” Piaguaje and Camacho wrote. “But to be clear, your representation of us is expressly limited to argument in that particular matter, and you are not authorized to make any concessions or agreements, or enter into any negotiations, without consulting with us in detail and receiving our prior consent.” An umbrella group whose Spanish name translates to the Union of those Affected by Texaco’s Petroleum Operations (UDAPT) rejected the retrial idea days later as well. “We feel, more than anybody, the pressure of the more than 21-year fight, of those affected, every year that passes,” that group said on April 27, according to a translation of the letter. “Our friends and neighbors succumb to illnesses that are linked to consuming contaminated water, crops and animals, while the new generations of our children grow up with the same conditions.” Chevron continues to deny responsibility for those diseases. Signed by Secoya leader Humberto Piaguaje, UDAPT’s letter states that Ecuador’s indigenous people put their faith in ongoing collections actions in three other countries. “In one of the jurisdictions, Canada, Chevron has enough assets to completely satisfy the quantity of the judgment,” the letter notes. Canada’s Supreme Court is currently deciding whether the fact that Chevron operates there through a subsidiary insulates it from the collections action. “Accordingly, the UDAPT does not accept the idea of a ‘retrial’ in U.S. courts, despite the promise it raises of yet another determination of Chevron’s culpability for the contamination on our lands,” the letter concludes. “We have followed the established process – directed in part by Chevron – for two decades. We must persevere.” Calling his clients’ response “natural,” Neuborne emphasized his longtime position that Ecuador’s appeals courts proved that Chevron’s allegations have “not tainted” the judgment. “If we can’t persuade American courts to respect the Ecuadorean judgment, there will be time enough to consider a next step,” Neuborne said. “One of the options would be a new trial in the United States. I’ll make my recommendations, but the clients will decide what to do.” The seriousness of Judge Wesley’s proposal has faced scrutiny from the legal community. Businessweek’s Paul Barrett opined that it may have been a “kind of law school Socratic exercise,” and Forbes legal journalist Roger Parloff’s column on the hearing found the whole notion “puzzling.” Judge Wesley found precedent for his idea in the case of Abouloff v. Oppenheimer, a 19th century British case that appears in the U.S. Supreme Court case of Hilton v. Guyot in 1895. Much like the U.S. intervention in Chevron’s Ecuadorean litigation, the Oppenheimer decision raised heckles in its day as an example of British imperialism in Russian affairs.

“If we had the powers, as Queen’s bench did, we could order you to go to trial – a trial that you once resisted mightily in the Southern District [of New York] – and retry this case,” he told Chevron’s attorney. Shubhaa Srinivasan, a barrister with the London-based firm Leigh Day, appeared to be impressed by Wesley’s erudition. “Very interesting comments from the judge in the case,” Srinivasan said in an email. “He seems to be very aware of the law and the options the judiciary has. Will the legal wrangling ever end!” Neuborne joked during the hearing that Wesley’s legal research proves he should be an “academe.” He added in an email that “whether 21st century U.S. courts possess the extremely broad remedial powers of an English chancery court in the 1880s is an open question.” Donziger commented that a new trial overturning U.S. District Judge Lewis Kaplan’s fraud ruling would put Chevron in a “major jam.” “In the Kaplan proceeding, Chevron never contested the overwhelming scientific evidence presented to Ecuador’s courts of the massive pollution it caused in Ecuador’s rainforest,” the attorney to the Ecuadoreans said in a statement. Kaplan barred evidence of pollution in Ecuador’s Oriente as irrelevant to Chevron’s fraud claims. “If that scientific evidence were to be admitted in a fair U.S. trial – unlike the one-sided show trial mounted by Judge Kaplan – there is no doubt Chevron would lose, which is why company lawyer Ted Olson squirmed when asked whether his client would commit to a new trial on the merits,” Donziger added. “Chevron will never voluntarily agree to a trial on the merits for its toxic dumping; when the company was forced to engage in such a trial in Ecuador it responded by attacking the courts, judges, and lawyers who were involved in a procedure that was holding it accountable.”